“China should be afraid of us”
Bill Browder was the largest foreign investor in Russia—until he became a thorn in Putin’s side because of his activism against corruption. Browder was denied entry to Russia in 2005, and his Russian lawyer Sergei Magnitsky was murdered in prison in 2009. Browder has warned against Putin for many years and has lobbied for the passing of the Magnitsky Act—a law that provides for the punishment of human rights abusers. Browder was a guest of Atlantik-Brücke in Hamburg and joined a panel with Atlantik-Brücke Vice Chairman Norbert Röttgen and journalist Katja Gloger. Before the event, the Atlantik-Brücke team interviewed Bill Browder about Ukraine, Russia, and the cohesion of the West in the face of an uncertain global situation.
You’ve known President Putin for a long time, and you have been called his number one enemy. You have stressed again and again the danger that he poses. Do you feel that the war against Ukraine has changed the degree to which your warnings about Putin have been taken seriously?
Well, first of all, let me correct the record. I’m no longer his number one enemy. I think that we can all safely conclude that Volodymyr Zelensky is his number one enemy, and probably Alexei Navalny is his number two enemy. I probably occupy the number three spot. And absolutely; the circumstances of the last 12 months have completely changed the way in which people view what I’ve been saying for the last 13 years since Sergei Magnitsky, my lawyer in Russia, was murdered by the Putin regime for uncovering a corruption scheme. I’ve been going around the world announcing very loudly and very clearly that Putin is not a normal head of state. He’s a cold-blooded killer. He’s a financial criminal, and he doesn’t operate using the same values, rules, or anything else that we do. My message was very inconvenient for many people, particularly in Germany, to be honest. Nobody in Germany really wanted to hear what I had to say. There was this—I guess now disgraced—philosophy of peace through trade, that if Russia was making enough money off Germany and vice versa, there would be no possibility of war. Just the opposite happened, which is that Germany for many years was benefiting from Russia to such an extent that the German foreign policy was essentially designed to appease Putin. I don’t blame Germany alone. Here in the UK where I live, everybody loved the oligarch money so much that nobody wanted to rock the boat. It was very difficult to get my message through. People would pay lip service to the issues that I brought up and then carry on appeasing Putin. When the war began, it was an ugly, terrible wake-up call to everybody who had been benefiting or trying to benefit, to those who had been used to sweeping such issues under the carpet. Now, there’s full recognition that what I’d been saying was correct, and full engagement with me regarding some of the issues and policies and my thoughts on what to do about them. But that only began a year ago.
Would you say that the Western sanctions against Russia, which were put in place very quickly after the war started, have been effective? And why have they not managed to dissuade Putin from waging this war?
Sanctions serve one of two purposes. They’re either a deterrent or a punishment. We have never used them properly as a deterrent. If sanctions had been used liberally and aggressively after Russia invaded Georgia, perhaps Crimea wouldn’t have happened. If we had used sanctions after Crimea, perhaps this full-scale invasion on February 24, 2022 wouldn’t have happened. Now that Putin has started the war, he’s not going to be deterred by sanctions. He has to win. If he doesn’t, he faces terrible problems at home, which potentially include losing power, going to jail, and dying. The question then is, what is the purpose of sanctions? And the answer is that sanctions also serve as a punishment. Specifically, we want to punish Russia in such a way that it doesn’t have the financial resources to continue to fight this war. But to do that, it’s a much more all-encompassing project than what we’ve done so far. What we’ve done up to now is terribly painful for the people who have been sanctioned. I can tell you that any oligarch who is sanctioned is feeling extreme pain and the average Russian is feeling extreme pain. They can’t use their iPhones anymore. They can’t go onto Instagram. They can’t travel to Europe. They can’t open bank accounts. Just about everything in their lives is upside down, difficult, and frustrating. But has this starved Putin of his financial resources to execute this war? To a certain extent, yes. Russia can no longer borrow money on the international capital markets so it can’t fund the war that way. About 60 % of Russia’s central bank reserves have been frozen, so it can’t dip into those. But Russia continues to sell oil and gas to a number of countries, particularly China and India. We haven’t figured out a way of stopping that from happening. As a result, money continues to flow in every day, to help them fight this war. And that will carry on until we figure out a way to cut off those financial flows as well.
What are your propositions in terms of how to go about that?
I think that we can go about that in a number of ways. We could say that anybody who buys Russian oil is in violation of U. S. sanctions; as a result, nobody would want to put its oil on their boats in case the boats were in violation of sanctions. There’s a lot of really nasty stuff that we could do, which we haven’t done yet—and we should think about doing it. This is a really ripe area for policy.
Are you worried at all about the consequences of stricter measures, particularly against China? Could this lead to a new Cold War? Or are we already in the middle of a new Cold War?
We have to exert our influence. We were so busy trying to placate Putin that we ended up with the current situation. If we do the same thing with Xi Jinping in China, then he’ll invade Taiwan. China should be afraid of us. If the United States, the European Union, the UK, Canada, Australia, and Japan were to band together and say that any boat carrying Russian oil will be sanctioned along with its owner, then what’s China going to do? I think that we need to be aggressive about this. China is a business-oriented country. If it wants to really get involved in this thing and upset its own business interests, then it’s going to have real problems at home. We have a huge amount of leverage that’s not been used, and we should use it.
Let us get back to Russia and its domestic situation. You already mentioned that the average Russian person’s life has been affected by the sanctions. How does both the effect of the sanctions on Russia and the effect of the war on Russia play out in the political climate within Russia?
There’s a very great assumption in your question that there is a political climate. Russia is now a totalitarian state. Anybody who has an alternative idea is either killed, imprisoned, or exiled. There is no political climate. It doesn’t really matter what people think in Russia. Of course, the regime tries to do whatever it can to bring and keep people on its side. The way they do this is by drumming up fake information and propaganda and by repeating it over and over again. And a lot of people believe it. So you end up with many people supporting the dictator. But anyone who has an alternative idea is not allowed to express it.
I think Putin has been afraid of everybody from the moment he came into power, and he’s been trying to sideline anybody who has any kind of charisma. He killed Boris Nemzow. He tried to kill Alexei Navalny. He imprisoned Vladimir Kara-Murza and Ilya Yashin. And then within his own circles, he regularly demotes, puts out to pasture, and in some cases kills people whom he views either as threats or as being disloyal. Any dictator has to worry. And Putin in particular, because he’s been around for so long and he’s caused so much trouble for so many people. There is the possibility of a coup. But I think the more likely scenario is that Putin is successful in keeping all of his competitors at bay. He’s been very successful so far, and there’s no reason to think that he won’t continue.
If this war continues at its current level for several years to come, what do you think will be the outcome for Russia and for Putin?
There’s no question that Putin has set Russia back multiple decades, first and most importantly for him in terms of military might. Something like 3,500 tanks have been destroyed in this war. So far, 165,000 soldiers have been killed and probably an equal number or even a larger number have become disabled. Infrastructure has been destroyed. Planes have been destroyed. And beyond that, you’ve had a brain drain of unprecedented proportions. The smartest people in Russia have left the country. Anyone who has capability and economic flexibility has left. And of course, it will take multiple decades before the West finally forgives Russia after Putin is gone. There’s a huge reparation bill that’s going to come up after this war is over, assuming the war will ever end. And there’s going to be a huge accounting for the injustices of the crimes that were committed. All that’s going to take decades before there’s any chance of Russia entering the democratic, free world. It’s been a terrible tragedy. And I know many Russians who don’t support Putin. Most of them, of course, are outside of Russia and are so ashamed of their country and so sad about its future because of this.
The consequences of this war on the global security architecture have already been quite significant: Finland will join NATO; Sweden has also expressed the wish to do so. Germany has significantly upped its defense spending. What do you think the effect of Russia’s war against Ukraine will be for the world in the long run?
I came of age when the Berlin Wall came down. I had just graduated and started my career, and we enjoyed something called the peace dividend. The idea of the peace dividend was that the amount of money spent on defense was diminished because we didn’t have this Cold War anymore. If you put money into the economy, it has a greater multiplier effect in terms of good economic outcomes than putting money into soldiers standing guarding a border. Now, we no longer have a peace dividend but a war cost, and it will reduce economic growth; it will reduce prosperity. Hopefully, whatever we have is going to be other than this terrible hot war in Ukraine—a cold simmering conflict with China or elsewhere with Russia, as opposed to a hot conflict. But it’s not a very optimistic set of assumptions that we have to work with going forward.
Do you think that the West’s consolidated answer to Russia will act as a deterrent to any future aggressors?
I think it will act as a deterrent. In the best case, we have cold conflicts, not hot ones. You know, China probably wanted to invade Taiwan and looked at all this lockstep alliance of the West and said, maybe we need to reconsider that or put it on the back burner. And I hope that that’s the ultimate perception of what we’ve done. But to all of a sudden spend 1 % or 2 % more of GDP on defense still involves a lot of money—money that could have gone to other purposes. Unfortunately, we don’t have that luxury anymore. We have no choice.
So in order to deter autocratic powers from using force, the West has to keep up very high levels of defense spending in the long run.
The bubble of peace and harmony that we have been living in has now been popped by Vladimir Putin. It’s going to cost us a lot more to make sure that we don’t suffer more of these wars in the future. And that will require peace through strength.